China’s central bank has declared that all crypto currency payments are illegal causing the global market to crash by 5.9 per cent at 11am UK time.
A Q&A posted on the People’s Bank of China’s website outlining government guidelines for cracking down on cryptocurrency trading has said all crypto payments are against the law.
It comes after the Asian superpower banned crypto mining in May, causing the market to crash and shaving 50 per cent off Bitcoin’s price.
A statement posted on the Central Bank’s website says that “virtual currency-related business activities are illegal financial activities.”
The bank said that as crypto currencies including Bitcoin and Ether are issued by non-monetary authorities “they are not legal and should not and cannot be used as currency in the market.”
“Virtual currency does not have the same legal status as legal currency,” the statement continued. The Bank stressed that the exchange of crypto currency for fiat or other crypto coins is prohibited under the law which means that even if foreign exchanges offer services to Chinese customers they will be breaking the law.
Bitcoin’s price has tumbled by 6 per cent in the wake of the news with its price tumbling from above $45,000 to $42,346.
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